Tax Avoidance - Accelerated/Partner Payment Notice & Follower Notice Response Service

Anyone who has participated in tax avoidance schemes can continue to expect to the focus of HMRC scrutiny and challenge. In recent years, parliament has given HMRC a raft of powers to target such schemes and their users and promoters.

Get specialist tax investigation help today: +44 (0)20 7710 3389

Tax avoidance

Tax avoidance

HMRC’s Counter-Avoidance Directorate was established to challenge anyone who has participated in tax avoidance schemes. The formation of this team has enabled HMRC’s operational and policy resources to unite into a single centre of expertise and is responsible for challenging avoidance schemes, issuing Accelerated Payment Notices (APNs), Follower Notices, and dealing with any representations thereon.

If you’ve engaged in planning, which is perceived by HMRC to be tax avoidance, you’re now far more open to scrutiny than ever before. The introduction of APNs, Follower Notices and the Targeted Anti-Avoidance Rule has given HMRC increased powers to attack such schemes and- obtain the tax payments HMRC believes are due, without being tied up in litigation. 

New legislation even prevents you from using the fact that you have sought advice as a defence, where those people giving the advice are connected with the transaction itself. Despite this, new avoidance arrangements continue to be developed and promoted.

It has, therefore, never been more important to seek independent advice where you, or HMRC, believe you have been involved in a tax planning arrangement.

APNs and Follower Notices

APNs and Follower Notices

APNs are demands for tax that HMRC believes is due, and will be issued if the following three conditions are met:

  • Condition A: An enquiry or appeal is in progress
  • Condition B: The tax return, claim, or appeal relates to a tax advantage resulting from a tax arrangement
  • Condition C: One or more of the following applies:
  1. A Follower Notice has been issued
  2. The arrangements are considered ‘DOTAS’  arrangements
  3. A General Anti-Abuse Rule (GAAR) notice has been issued

APNs demand payment of tax that is in dispute. If the dispute is resolved in your favour then HMRC will reimburse the payment with a small amount of interest. APNs cannot be appealed, although representations can be made if the APN has been issued wrongly or is incorrect in some way. Penalties of up to 15% of the amount due will apply if the APNs are not paid in time.

Follower Notices are issued if you have been involved in schemes similar to those that have been successfully challenged by HMRC. HMRC issue Follower Notices inviting you to take corrective action to deny the tax advantage claimed by using the scheme, rather than continue with a case that HMRC is now certain it will win.

Representations can be made if you believe the Follower Notice is invalid. However, if corrective action is not taken in time, penalties of up to 50% of the unpaid tax can be applied. HMRC has been applying harsh failure to take corrective action (FTTCA) penalties particularly in cases where HMRC believes there has been a significant delay in taking corrective action.

How can we help?

How can we help?

We can review your planning and give you an honest and impartial assessment of your chances of successfully challenging HMRC, both in terms of any existing enquiry and also APNs and Follower Notices. We will then recommend either continuing the challenge or settling with HMRC.

If you have been issued with penalties in respect of either the late payment of APNs or FTTCA, we can confirm if those penalties are fair and proportionate in the circumstances of your case and, where appropriate, make robust representations for you.

Should we recommend a settlement, and you agree, we are well placed to negotiate this with HMRC, and agree on a favourable payment plan where required.

Hi Mark, we’re very happy with this result. Thank you for your assistance in this matter.
Instructing Solicitor

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If you'd like us to give you a call, fill in your details below and we'll email to arrange a good time to speak to our Head of Tax investigations team, Mark Taylor. All communications are in the strictest confidence.

If you'd prefer to speak to our team directly, please call +44 (0)20 7710 3389.

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